Circular economy practices in locally rooted family SMEs: the role of the socio-spatial context

Pablo Doucet (), Pablo Garrido-Prada (), Javier Parra-Domínguez (), Ignacio Requejo () and Isabel Suárez-González ()
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Pablo Doucet: Universidad Nacional de Educación a Distancia (UNED)
Pablo Garrido-Prada: Universidad de Salamanca, IME and Department of Business Administration
Javier Parra-Domínguez: Universidad de Salamanca, IME and Department of Business Administration
Ignacio Requejo: Universidad de Salamanca, IME and Department of Business Administration
Isabel Suárez-González: Universidad de Salamanca, IME and Department of Business Administration

Small Business Economics, 2025, vol. 65, issue 4, No 12, 2385-2406

Abstract: Abstract This paper examines whether family-owned SMEs differ from non-family SMEs in their adoption of circular economy (CE) practices, with a focus on how these differences are shaped by socio-spatial contexts. Specifically, we investigate the role of a firm’s rural or urban location and the level of country environmental awareness. Using a sample of 13,319 SMEs, we find that family ownership increases the probability of adopting a higher number of CE practices. Furthermore, we find that the positive effect of family ownership on the adoption of CE practices is stronger in rural areas. Finally, while both family and non-family SMEs are more likely to adopt CE practices in countries with greater environmental awareness, non-family SMEs appear to be relatively more influenced by this factor. These findings offer new insights into the intricate interplay of ownership and the socio-spatial context as determinants of the adoption of CE practices in SMEs.

Keywords: Family SMEs; Circular economy; Socio-spatial context; Rural areas Environmental awareness (search for similar items in EconPapers)
JEL-codes: L20 M14 Q50 R11 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11187-025-01060-z

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